Comparison of rate of return for different levels of R&D input (T 5 5.5 years) (IMAGE)
Caption
The numerical results in Table 1 reveals a “jump effect”, that is, the post-funding valuation of a startup often show a jump “increase” from the pre-funding valuation by more than the actual amount of new funding received. This confirms to a common observation that, at early stages of development for startups, the very fact of securing new funding by itself enhances the probability of success for the startup and raises its value to a new level.
Credit
Shaun Shuxun Wang.
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